Case:
Wang Dacheng is going to start a consulting company, which needs not only funds and personnel, but also business premises.
Therefore, Wang Dacheng decided to invest his own real estate in the name of the company as a subscribed capital. So how to control this behavior of investing in real estate in tax payment?
I. Individual income tax
Is it necessary for Wang Dacheng to pay personal income tax by valuing the property he bought and investing in the company name as the subscribed capital?
Wang Dacheng invested the real estate in the company's name by investing in shares, which is equivalent to the real estate in exchange for the equity of the invested enterprise. It is an act of paid transfer of real estate, and personal income tax should be levied according to the item of "income from property transfer".
However, personal income tax shall be exempted for the income obtained from the transfer of the house for personal use for more than 5 years and which is the only living room for the family.
Therefore, if Wang Dacheng invests in real estate, when the transfer occurs, the income from real estate transfer should be confirmed according to the assessed fair value. The balance of the income from property transfer after deducting the original value of the property and reasonable taxes and fees is taxable income, and personal income tax is paid according to the income from property transfer.
However, if Wang Dacheng transfers the house for personal use for more than 5 years, and it is the only living room for the family, it will be exempted from personal income tax.
Second, the value-added tax
Does Wang Dacheng need to pay value-added tax when he buys his own property as a share and invests it in the company name as the subscribed capital?
According to Article 10 of the Pilot Implementation Measures for Changing Business Tax to Value-added Tax: "Selling services, intangible assets or real estate means providing services with compensation and transferring intangible assets or real estate with compensation."
Article 11 of the pilot implementation measures for changing business tax to value-added tax stipulates: "compensation refers to obtaining money, goods or other economic benefits."
Therefore, investment in real estate is equivalent to real estate in exchange for the equity of the invested enterprise, which has obtained "other economic benefits" and should pay value-added tax.
However, if the property invested in shares is "housing", special treatment shall be made according to the following circumstances:
1. If the property invested in shares is purchased by individuals for less than 2 years, the value-added tax shall be paid in full at the rate of 5%;
2. If the property invested in shares is purchased by individuals for more than 2 years (including 2 years), it shall be exempted from value-added tax.
The above-mentioned 1 and 2-point policies are applicable to areas outside Beijing, Shanghai, Guangzhou and Shenzhen.
3. If the property invested in shares is sold to the outside world as a house purchased for less than 2 years, the value-added tax shall be paid in full at the rate of 5%;
4. If the property invested in shares is sold as a non-ordinary house that has been purchased for more than 2 years (including 2 years), the value-added tax shall be paid at the rate of 5% based on the difference between the sales income and the purchase price of the house;
5. If the property invested in shares is ordinary housing purchased for more than 2 years (including 2 years) and sold externally, the value-added tax shall be exempted.
The above 3, 4 and 5 policies are only applicable to Beijing, Shanghai, Guangzhou and Shenzhen.
Iii. Land value-added tax
Does Wang Dacheng need to pay the land value-added tax when he values the property he bought and invests in the company name as the subscribed capital?
According to the relevant regulations of land value-added tax, the units and individuals who transfer the right to use state-owned land, buildings and their attachments on the ground and obtain income are taxpayers of land value-added tax. The so-called income refers to the transfer of real estate by sale or other means.
Therefore, Wang Dacheng invested the real estate in the company's name by investing in shares, which is equivalent to real estate in exchange for the equity of the invested enterprise. It is an act of paid transfer of real estate and should pay land value-added tax.
However, according to the relevant provisions of the Notice of the Ministry of Finance State Taxation Administration of The People's Republic of China on Land Value-added Tax Policies for Enterprise Restructuring and Reorganization (Caishui [2015] No.5):
During the period of 20 15 1 month 1 day to 20 171February 3 1 day, units and individuals invested in state-owned land and houses, and transferred the ownership of state-owned land and houses to them.
That is to say, if Wang Dacheng invested in real estate during the period from 20 15 1 month to 20 1 71February 3 1 day, the land value-added tax will not be levied temporarily.
At the same time, if the real estate invested by Wang Dacheng is "housing", according to the relevant provisions of the Notice on Adjusting the Tax Policy of Real Estate Transactions (Cai Shui [2008]137), the land value-added tax will be temporarily exempted for individual housing sales.
Fourth, the property tax
Does Wang Dacheng need to pay property tax when he buys his own property as a share and invests it in the company's name as the subscribed capital?
According to the relevant provisions of State Taxation Administration of The People's Republic of China's Reply on Some Issues Concerning Anhui Real Estate Tax Business (Guo Shui Han Fa [1993] No.368).
For the property invested in the joint venture, it should be treated differently when the property tax is levied according to the specific circumstances of the joint venture. For the joint venture of real estate investment, investors participate in the investment profit sharing, and * * * takes risks, the property tax shall be levied according to the original value of the property; In the case of real estate investment, collecting fixed income and not taking the risk of joint venture, the real estate rent is actually obtained in the name of joint venture, and the lessor shall pay the property tax according to the rental income according to the relevant provisions of the Provisional Regulations of the People's Republic of China on Property Tax.
Therefore, how to pay the property tax on the property invested by Wang Dacheng depends on the form of the investment contract signed by Wang Dacheng. There are differences in the payment of property tax under different forms.
V deed tax
Wang Dacheng bought his own property as a share, and invested it in the company's name as the subscribed capital. How to pay the deed tax?
According to the relevant provisions of deed tax:
1, the transfer of land and house ownership between the same natural person and its sole proprietorship enterprise and one-person limited liability company is exempt from deed tax.
2. Operators of individual industrial and commercial households transfer the ownership of houses and land under their personal names to individual industrial and commercial households, or individual industrial and commercial households transfer the ownership of houses and land under their names back to the original operators' personal names, which are exempt from deed tax.
A partner of a partnership enterprise transfers the ownership of houses and land under its name to the partnership enterprise, or the partnership enterprise transfers the ownership of houses and land under its name back to the original partner's name, which is exempt from deed tax.
Therefore, Wang Dacheng will invest the real estate under his own name in the name of the company he opened, and will be exempted from deed tax.
VI. Land use tax
Wang Dacheng bought his own property at a fixed price and invested it in the company name as the subscribed capital. Does the property need to pay land use tax?
According to Article 2 of the Provisional Regulations on Urban Land Use Tax, units and individuals who use land in cities, counties, towns and industrial and mining areas are taxpayers of urban land use tax and shall pay land use tax in accordance with the provisions of these regulations.
In addition, according to the relevant provisions of the Notice of the State Administration of Taxation on Issuing the Interpretation and Interim Provisions on Some Specific Issues Concerning Land Use Tax ((1988) Guo Shui Di ZiNo. 15), the tax exemption and exemption of land use tax for individual-owned residential houses and courtyard land shall be determined by the tax bureaus of provinces, autonomous regions and municipalities directly under the Central Government.
Therefore, 1, Wang Dacheng needs to pay the land use tax according to the relevant provisions of the land use tax if the property he invests in is not a house; 2, if the property he invests in is a house and belongs to an enterprise, if it does not meet other relevant provisions on exemption from land use tax, he should go through the formalities of transferring and changing the registration of the house ownership, and levy the urban land use tax from the month after the house ownership certificate is issued by the real estate ownership registration authority.
Policy basis
1, Notice of State Taxation Administration of The People's Republic of China, Ministry of Finance on Individual Income Tax Policies for Personal Non-monetary Assets Investment (No.41Cai Shui [20])
2. Notice of State Taxation Administration of The People's Republic of China on Relevant Issues Concerning the Collection of Individual Income Tax on Income from Individual Housing Transfer (Guo Shui Fa [2006] 108)
3. Notice of the Ministry of Finance, the Ministry of State Taxation Administration of The People's Republic of China and the Ministry of Construction on Relevant Issues Concerning the Collection of Individual Income Tax on Personal Income from Housing Sale (Caishuizi [1999] No.278).
4. Notice on Tax Policies for Low-rent Housing, Affordable Housing and Housing Leasing (Caishui [2008] No.24)
5. Notice of State Taxation Administration of The People's Republic of China, Ministry of Finance on Deed Tax Policy for Restructuring and Reorganization of Enterprises and Institutions (Cai Shui [2012] No.4)
6. Notice of State Taxation Administration of The People's Republic of China, Ministry of Finance, on the Deed Tax Policy of Financing by Sale and Leaseback (Cai Shui [2012] No.82).
VII. Stamp Duty
Wang Dacheng bought his own property as a share, and invested it in the company's name as the subscribed capital. How to pay stamp duty?
According to the Provisional Regulations of the People's Republic of China on Stamp Duty (the State Council DecreeNo. 1 1), the deed of property right transfer shall be affixed with 0.5‰ of the amount contained in the deed.
Therefore, Wang Dacheng invested his purchased property in the name of the company at a fixed price, and as the subscribed capital, he should pay stamp duty according to the amount stated in the property right transfer document.
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